Steinhoff offers settlement to resolve claims


Steinhoff offers settlement to resolve claims

Published Date: 2020-07-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Steinhoff offers settlement to resolve claims

The group says if all claims against it were successful, its net asset value would fall short of the amount needed to settle them.

Steinhoff International has proposed a R16.5 billion settlement with those who are trying to sue for the accounting fraud that resulted in a precipitous decline in its share price in December 2017. The settlement will include some shareholders who acquired shares in the market and also contractual claims from businesses that were sold to Steinhoff in return for shares in the retailer.

The company said about 90 separate legal proceedings have been commenced against it and its subsidiaries in the Netherlands, Germany and South Africa. While all the claimants hadn't yet quantified their alleged damages, the combined claims of those that had came to more than R136 billion. Claims had also been made against former directors and management of its operations.

Steinhoff said if all claims against it were successful at the amounts demanded, its net asset value would fall far short of the amount required to satisfy them in full, which would result in liquidation proceedings. It said the would materially impair the value of assets available for distribution and adversely affect the timing and amount of the claimants' recoveries relative to the proposed settlement.

It has proposed paying the different groups of claimants 50% in cash, with the balance in shares of subsidiary Pepkor Holdings.

The company said the settlement proposal was made on the basis that it didn't represent an admission of any liability in respect of any of the claims against it.

Reuters reported yesterday evening that shareholder rights group European Investors VEB had come out in support of Steinhoff's proposal. The Netherlands-based group was one of the claimants holding Steinhoff liable for all losses incurred by shareholders. VEB had also agreed to withdraw its collective legal battle with immediate effect.

Steinhoff's shares rose 11% to R1.04 yesterday. Pepkor declined 0.4% to R10.50.

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